Ask managers today how they define their workforce, and a common answer is, “That’s a very good question.” It’s a good question, managers tell us, because they feel often squeezed between two realities. One reality is that their workforce increasingly depends on external workers. The other reality is that their management practices, systems, and processes are designed for internal employees. The struggle to reconcile these two realities is an ongoing challenge, with significant implications for strategy, leadership, organizational culture, and workforce management practices.
Our research makes clear that most managers today consider employees and other workers who create value for the enterprise — including contractors, service providers, gig workers, and even software bots — to be part of their workforce. Our recent global executive survey affirms that the vast majority — about 87% — of respondents include some external workers when considering their workforce composition.
At the same time, most workforce-related practices, systems, and processes focus on employees, not external workers. Workforce planning, talent acquisition, performance management, and compensation policies, for example, all tend to focus on full-time (and sometimes part-time) employees. Consequently, organizations often lack an integrated approach to managing a workforce in which external workers play a large role.
As one of the executives we interviewed for this report told us, “Wouldn’t it make sense to become just as mature about managing this segment of the workforce, which can be even bigger than your payroll workers?”
The search for an integrated approach to strategically managing a diverse group of internal and external workers has led some forward-thinking executives to the idea of a workforce ecosystem.
We define a workforce ecosystem as a structure focused on value creation for an organization that consists of complementarities and interdependencies.1 This structure encompasses actors, from within the organization and beyond, working to pursue both individual and collective goals.
This promising idea — which we discuss in detail in this report — offers several potential benefits that could help managers think through the strategic, organizational, regulatory, and practical implications of a workforce comprising employees, external workers, and others.